The total value of the U.S. housing market increased $1.9 trillion in 2018 alone, and many investors, both new and established, are eager to claim their share. And while real estate can be one of the most lucrative ways to create passive income, many established and would-be investors grossly underestimate the complexity and dynamics of the real estate investment market. There is a significant learning curve, a myriad of risks, and a great deal of both financial and time capital required to get started and stay successful. It can be easy for an individual investor to lose motivation when encountering any of the many obstacles along the path to payoff for their real estate investment.
That’s exactly how Lance, a real estate investor in Austin, TX felt after his first few flips. He was looking to spend less time on his real estate properties, but not give up the incremental income he was started to realize. That’s when he made his first turnkey property investment. “I purchased my first turn key property in 2015, but I had invested in other properties before I went the turnkey route. I like the idea of market diversity, the turnkey has worked with me on everything really well. I have had a great experience and it hasn’t taken up much of my time which is exactly what I was going for.” So what is so different about this type of real estate investment?
What is a Turnkey Investment Property?
Turnkey properties began to grow in popularity following the housing market decline of 2007- 2008, when it became cheaper to buy homes than rent them in most parts of the United States. Turnkey investments continue to gain momentum as a viable, attractive option for investors, as they realize their ability to reduce risk and boost their profit margins.
“Investing in turnkey properties has become a viable alternative method for property investing especially when you have limited time and capital to spend. One of the things that scare some people away from real estate investing is the time commitment. A lot of people feel that owning investment property is like having a second full-time job but it doesn’t have to be that way”, says Matthew Fritz, a real estate wholesaler in Ohio.
Benefits of Utilizing a Turnkey Investment Company
A turnkey investment company finds, acquires, rehabs, rents, and then sells cash-flowing rental properties to prospective investors. Their services are usually packaged with their own in-house property management company, freeing the investor from the significant strain on their time and resources. Ideally, they provide real estate investors an inventory of move-in ready properties, access to prospective tenants and even property management, which can be a painful hassle for many investors.
Christopher D. Clothier, author of “The Turnkey Revolution: How to Passively Build Your Real Estate Portfolio for More Income, Freedom, and Peace of Mind”, is a nationwide real estate investor and speaker. “The biggest benefit is leveraging other experts’ time. The biggest drawback is making sure you are working with experts and that you are getting value for your investment. In order to avoid the pitfalls and drawbacks, a passive, turnkey investor needs to focus on purchasing the absolutely highest quality properties in the best areas and with teams that have years of experience. Experience in renovating properties to the highest level, how to choose the best neighborhoods, how to provide a high-level experience for residents so they choose to live in properties for longer, which limits move-out expenses and vacancies. Buying a turnkey property is a long-term, buy and hold investment. Investors who find the most success are the ones who choose the highest quality providers and properties.”
Not all turnkey investment companies are the same, or provide the same level of service. It is important to understand and conduct due diligence before turning to this alternative option for real estate investing. One such expert, Turnkey Property Pro, provides comprehensive services and support across the entire lifecycle of your real estate investment, and works with investors to identify long-term goals and identify properties that best align well each investor’s specific needs.
With the right turnkey investment company working for you, the whole real estate investment process can become significantly less cumbersome, and even more lucrative, as you begin to generate passive income.
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